M/s. CROWN FROZEN FOODS, MUMBAI v. ACIT - 12(2), MUMBAI

ITA 201/MUM/2007 | 2000-2001
Pronouncement Date: 30-04-2010 | Result: Allowed

Appeal Details

RSA Number 20119914 RSA 2007
Assessee PAN MARCH2009F
Bench Mumbai
Appeal Number ITA 201/MUM/2007
Duration Of Justice 3 year(s) 3 month(s) 22 day(s)
Appellant M/s. CROWN FROZEN FOODS, MUMBAI
Respondent ACIT - 12(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted K
Tribunal Order Date 30-04-2010
Date Of Final Hearing 04-02-2010
Next Hearing Date 04-02-2010
Assessment Year 2000-2001
Appeal Filed On 08-01-2007
Judgment Text
ITA NO. 201/MUM/07 ASSESSMENT YEAR 2000-01 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI K BENCH MUMBAI BEFORE SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) AND SHRI V DURGA RAO (JUDICIAL MEMBER). ITA NO. 201/MUM/07 ASSESSMENT YEAR 2000-01 CROWN FROZEN FOODS .APPELLANT 203 DALAMAL CHAMBERS NEW MARINE LINES MUMBAI 400 020 VS. ASSISTANT COMMISSIONER OF INCOME TAX - CIRCLE 12(2) MUMBAI . RESPONDENT APPELLANT BY : SHRI HIRO RAI RESPONDENT BY : SHRI A K SINHA O R D E R PER PRAMOD KUMAR: 1. IN THIS APPEAL AGAINST CIT(A)S ORDER DATED 24 TH MARCH 2009 FOR THE ASSESSMENT YEAR 2002-03 THE ONLY GRIEVANCE BEFORE US IS THAT THE CIT(A) ERRED IN UPHOLDING THE VALIDITY OF REASSESSMENT PRO CEEDINGS UNDER SECTION 147 OF THE INCOME TAX ACT 1961. 2. BRIEFLY THE MATERIAL FACTS. THE ASSESSEE BEFORE US IS ENGAGED IN BUSINESS OF PROCESSING AND EXPORT OF FISH AND FISH PRODUCTS. THE ITA NO. 201/MUM/07 ASSESSMENT YEAR 2000-01 PAGE 2 OF 6 ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON 27 TH MARCH 2003 WHEREIN A DEDUCTION OF RS 14 99 76 320 UNDER SECTIO N 80 HHC AS CLAIMED BY THE ASSESSEE WAD ALLOWED. HOWEVER LATER THIS ASSESSMENT WAS SUBJECTED TO REVISION PROCEEDINGS UNDER SECTION 263 ON THE GROUND THAT THE ASSESSEE HAS BEEN ALLOWED THE DEDUCTION IN EXCE SS INASMUCH AS DEPB ENTITLEMENTS WERE NOT COVERED BY THE SECTION 28(III A)AND (IIIB) AND THE PROVISO TO SECTION 80 HHC (3) HAS BEEN APPLIED BY T HE ASSESSEE TO THE AMOUNT RECEIVED ON SALE OF DEPB CREDIT. WHEN THE M ATTER FINALLY TRAVELLED TO THE TRIBUNAL IN APPEAL TRIBUNAL QUASHED THE RE VISION PROCEEDINGS BY TAKING NOTE OF CERTAIN JUDICIAL PRECEDENTS IN FAVOU R OF THE ASSESSEE AND THE CORRESPONDENCE ON THE ISSUE OF ELIGIBILITY OF PROFI TS ON SALE OF DEPB FOR DEDUCTION UNDER SECTION 80 HHC AND BY OBSERVING THA T THE ASSESSING OFFICER HAD PASSED THE ORDER UNDER SECTION 143(3) AFTER TAKING INTO ACCOUNT ALL THE NECESSARY DETAILS AND ..NOW THE LE ARNED CIT HAS TAKEN A DIFFERENT VIEW ON THE ISSUE. IT WAS THUS HELD BY THE TRIBUNAL THAT THE REVISION PROCEEDINGS WERE RESORTED TO ON A MERE CHA NGE OF OPINION. THE MATTER HOWEVER DID NOT REST THERE. THE ASSESSING OFFICER THEN PROCEEDED TO REOPEN THE ASSESSMENT PROCEEDINGS FOR THE SAME R EASON. THERE IS ALSO NO DISPUTE ABOUT THE BASIC POSITION THAT IT WAS A C ASE OF INITIATING THE REASSESSMENT PROCEEDINGS WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND AS SUCH IT WAS COVERED BY THE MAIN PROVISION OF SECTION 147. IT WAS OBSERVED BY THE ASSESSING OFFIC ER THAT THE REASSESSMENT HAS BEEN RESORTED TO WITHIN FOUR YEARS FROM END OF THE RELEVANT ASSESSMENT YEAR AND AS SUCH AS LONG AS TH E ASSESSING OFFICER IS SATISFIED THAT ANY INCOME HAS ESCAPED ASSESSMENT A ND EVEN IF ASSESSEE HAS MADE FULL AND PROPER DISCLOSURE OF PARTICULARS OF INCOME THE REASSESSMENT PROCEEDINGS UNDER SECTION 147 CANNOT B E FAULTED. IT WAS ALSO HELD THAT THE TAX AUTHORITIES HAVE ALL ALONG T AKEN THE CLAIM OF DEDUCTION UNDER SECTION 80 HHC IN RESPECT OF DEPB P ROFITS IS NOT ADMISSIBLE AND THE VIEW SO TAKEN BY THE TAX AUTHOR ITIES HAS BEEN DULY RECOGNIZED AND APPROVED BY THE TAXATION LAWS (AMEND MENT) ACT 2005 ITA NO. 201/MUM/07 ASSESSMENT YEAR 2000-01 PAGE 3 OF 6 WHICH HAS MADE RETROSPECTIVE AMENDMENT ON THE SAME LINES. IT COULD NOT THEREFORE BE SAID THAT THERE WAS ANY CHANGE OF OPIN ION. THE ASSESSING OFFICER ALSO REFERRED TO THE TESTS LAID DOWN BY HON BLE SUPREME COURT IN THE CASE OF ITO VS LAKHMAN MEW DAS (103 ITR 437) IN SUPPORT OF HIS JUSTIFICATION FOR REOPENING. AGGRIEVED INTER ALIA BY REOPENING OF THE ASSESSMENT THE ASSESSEE CARRIED THE MATTER IN APPE AL BEFORE THE CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATIS FIED AND IS IN FURTHER APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS A LSO THE APPLICABLE LEGAL POSITION. 4. WE HAVE NOTED THAT THERE IS A CATEGORICAL FINDIN G BY A CO ORDINATE BENCH OF THIS TRIBUNAL THAT THE LATER STAND OF THE COMMISSIONER TO THE EFFECT THAT THE PROFITS ON SALE OF DEPB CREDITS ARE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80 HHC IS A MERE SUBSTITUTION OF ONE POSSIBLE VIEW OF THE MATTER TAKEN BY THE ASSESSING OFFICER BY ANOTHER P OSSIBLE VIEW OF THE MATTER BY THE COMMISSIONER. IN THE SAID ORDER DATE D 2 ND FEBRUARY 2005 THE TRIBUNAL HAS AFTER TAKING NOTE OF CERTAIN JUDI CIAL PRECEDENTS IN FAVOUR OF THE ASSESSEE AS AVAILABLE AT THAT POINT OF TIME OBSERVED AS WE HAVE EXTRACTED EARLIER AS WELL THE ASSESSING OFFICER H AD PASSED THE ORDER UNDER SECTION 143(3) AFTER TAKING INTO ACCOUNT ALL THE NECESSARY DETAILS AND ..NOW THE LEARNED CIT HAS TAKEN A DIFFERENT VI EW ON THE ISSUE. THESE FINDINGS BEING FROM A COORDINATE BENCH ARE BINDING ON US. THE QUESTION THEN ARISES WHETHER IN SUCH A SITUATION IT CAN BE SAID THAT IT IS MERELY A CHANGE OF OPINION BY THE ASSESSING OFFICER TO NOW TAKEN A STAND THAT THE DEDUCTION UNDER SECTION 80 HHC IS NOT ADMI SSIBLE IN RESPECT OF DEPB CREDITS. VIEWED IN THE LIGHT OF THE FINDINGS OF THE COORDINATE BENCH ITA NO. 201/MUM/07 ASSESSMENT YEAR 2000-01 PAGE 4 OF 6 WHICH WE ARE DUTY BOUND TO FOLLOW THE ANSWER HAS T O BE IN AFFIRMATIVE. HONBLE SUPREME COURTS HAS IN THE CASE OF CIT V S KELVINATOR OF INDIA LTD ( 320 ITR 561) HELD THAT SECTION 147 CANNOT BE S O CONSTRUED AS TO GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN THE ASSESSMENTS ON THE BASIS OF MERE CHANGE OF OPINION WHICH CANNOT B E PER SE REASONS TO REOPEN. EVEN IF WHEN REASSESSMENT IS RESORTED TO W ITHIN FOUR YEARS THE BASIC CONDITIONS OF THE MAIN PROVISIONS ARE TO BE C OMPLIED WITH AND THE ABOVE OBSERVATIONS MADE BY THEIR LORDSHIPS ARE IN T HIS CONTEXT. NO DOUBT IN CASE THE ASSESSMENT IS COMPLETED UNDER SECTION 1 43(1) THAT SITUATION WOULD BE MATERIALLY DIFFERENT AS NO OPINION CAN BE SAID TO HAVE BEEN FORMED ONLY BECAUSE A CLAIM FOR DEDUCTION HAS BEEN ACCEPTED UNDER SECTION 143(1) BUT RIGHT NOW WE ARE IN SEISIN OF A SITUATION IN WHICH THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) OF THE ACT. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE LAW LAID DOWN BY THE HONBLE SUPREME COURT AS ALSO A FINDING OF FACT GIV EN BY THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR THIS VERY YEAR WE HOLD THAT THE REASSESSMENT PROCEEDINGS WERE INDEED BAD IN LAW. WE THEREFORE QUASH THE REASSESSMENT PROCEEDINGS. AS THE REASSESSMENT I TSELF IS QUASHED THE ADDITIONS MADE IN THE REASSESSMENT ORDER DO NOT SUR VIVE AND REQUIRE NO ADJUDICATION. 5. IN THE RESULT THE APPEAL IS ALLOWED IN THE TERM S INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON 30 TH DAY OF APRIL 2010 SD/- SD/- ( V D RAO) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 30 TH DAY OF APRIL 2010. ITA NO. 201/MUM/07 ASSESSMENT YEAR 2000-01 PAGE 5 OF 6 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT MUMBAI 4. THE COMMISSIONER (APPEALS) MUMBAI 5. DEPARTMENTAL REPRESENTATIVE - BENCH MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI ITA NO. 201/MUM/07 ASSESSMENT YEAR 2000-01 PAGE 6 OF 6 DATE INITIAL 1. DRAFT DICTATED ON 23.4.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 26.4.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 26.4.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 26.4.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 26.4.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 30.4.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 30.4.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER